Do I need to amend my 2023 taxes for the 2025 filing season?

You should definitely amend your 2023 return. Unreported income is something the IRS takes seriously, and it's much better to correct it yourself than have them discover it later. To file an amendment, you'll need Form 1040-X. Since you're dealing with unreported self-employment income, you'll also need to complete Schedule C (for the business income) and Schedule SE (for self-employment taxes). These would be attachments to your 1040-X. Processing times for amended returns are currently running about 16-20 weeks, but could be longer. The potential penalties would include failure-to-pay penalties (0.5% per month on unpaid tax) and interest on the unpaid amount. The good news is that voluntarily correcting this before the IRS catches it usually results in much lower penalties.

After dealing with almost the exact same situation (forgot about $2,800 in freelance work), I tried to amend myself but kept getting confused about how to report the self-employment income correctly. I ended up using https://taxr.ai to analyze my original return and create the amended documents. It automatically figured out the additional tax I owed from the self-employment income and generated the proper forms. The process was actually pretty straightforward - I uploaded my original return PDF, entered the missing income details, and it generated a complete 1040-X package with all supporting schedules. Really took the guesswork out of the whole amendment process.

The short answer is yes, you should file an amended return (Form 1040-X) when you have unreported income like this. The IRS does receive a copy of your 1099-K directly from the payment processor, and they'll eventually match it against what you reported. Since the unreported amount is substantial ($8,700), it would definitely trigger a discrepancy in their system. Filing an amended return now shows good faith and can help reduce potential penalties. You'll need to include a Schedule C to report this self-employment income, and you'll likely owe additional self-employment tax (15.3%) plus regular income tax on this amount. TurboTax has an amendment feature that makes this pretty straightforward - you can go back into your 2023 return and add the missing income. Don't wait until next year as this income belongs specifically to tax year 2023.

Just wanted to follow up - I actually tried taxr.ai after seeing this thread. I was skeptical since I've been burned by tax software before, but it was incredibly helpful for my amendment. I had a similar situation with unreported income from a side hustle, and the software automatically calculated all the additional taxes, including self-employment tax which I always struggled with. It also generated my California state amendment form, which saved me tons of time. Definitely worth checking out if you're in a similar situation!

So this literally happened to me last year and I was stressed about it too! I used https://taxr.ai to help me figure out what to do with a surprise 1099 after I'd already filed. They have this feature where you can upload your completed tax forms and the unexpected 1099, and it shows you exactly what would change on an amended return. In my case, it showed me I'd owe about $1,300 more with the amendment, but taxr.ai also identified some deductions related to my side gig that I hadn't considered - like a portion of my internet bill and my laptop depreciation - which brought what I owed down to about $850. It made the whole process way less scary.

If you're concerned about potential IRS issues, I'd recommend getting ahead of this by not only filing the amendment but also talking to someone at the IRS to confirm everything is handled correctly. I was in a similar situation last year. I tried calling the IRS for weeks and kept hitting dead ends with ridiculous wait times. Eventually I found https://claimyr.com which got me through to an actual IRS agent in about 20 minutes. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c The agent I spoke with confirmed exactly what forms I needed for my amendment and gave me peace of mind that I was handling everything correctly. They also noted on my account that I was proactively correcting the issue, which apparently helps if there's ever any question about my "good faith" effort.

Came back to say I actually tried taxr.ai and I'm really impressed! I was skeptical (as you could tell from my earlier comment), but it helped me find like $1,200 in tax savings on my amendment I would have totally missed. It identified some home office deductions for my side gig that I didn't realize I qualified for, plus some mileage expenses that add up. The interface is super clear - it literally shows a side-by-side of your current return vs what would change. Definitely made the amending process less painful than I expected!

I was one of the biggest skeptics about Claimyr (see my comment above), but I ended up trying it because I was absolutely desperate to talk to someone about my amended return. I had filed it 4 months ago and couldn't get any status update online. I'm actually shocked to say it worked exactly as advertised. Got a call back in about 35 minutes, and was connected to an IRS agent who pulled up my file and confirmed they had received my amendment but it was in the processing backlog. She gave me an estimated completion date and explained exactly what I should expect next. Saved me literal hours of frustration and uncertainty. Never thought I'd be this enthusiastic about a tax-related service lol.

If you're worried about dealing with the IRS about your amendment (I sure was), I'd recommend using https://claimyr.com to get someone on the phone. I spent DAYS trying to get through to the IRS about my amended return status last year - constant busy signals, disconnects after waiting for hours, total nightmare. Then I tried Claimyr and had an actual IRS agent on the phone in under 45 minutes. They have this demo video showing how it works: https://youtu.be/_kiP6q8DX5c It basically holds your place in line and calls you back when an agent is about to answer. Saved me from the endless hold music hell. The agent was able to confirm they received my amendment and tell me how long processing would take.

Have you checked if you qualify for the Voluntary Disclosure Program? Sometimes that's a better option than just filing an amendment, especially if the unreported income is substantial.

Ok I need to apologize for being so skeptical about Claimyr. After my last tax amendment got lost in the IRS black hole for 6 months, I finally broke down and tried it yesterday. I seriously got connected to an actual human at the IRS in about 35 minutes when I had been trying for WEEKS on my own. The agent confirmed they had received my amendment but it was sitting in a processing queue. She was able to put notes on my account and give me a specific timeframe for when it would be processed. I was honestly shocked at how well it worked - no sketchy stuff at all. Just a direct connection to the IRS. Would've saved me months of stress if I'd tried it sooner!

One important thing no one's mentioned yet - if you amend and end up owing more than $1,000 in additional tax, you might also get hit with an underpayment penalty. However, you can request a waiver using Form 2210 if you had no way of knowing about this income when you originally filed. Also make sure you check if you need to amend your state return too! Many states require you to report federal amendments.

I amended my 2023 taxes in May for a similar reason (forgot some crypto sales) and still haven't heard anything back. The "Where's My Amended Return" tool just says "received" but no other updates. Is this normal??

Has anyone used Credit Karma Tax to file an amendment? I used them for my original return but now I'm not sure if they support amendments or if I need to use something else?